NetSuite's next steps - a conversation with founder Evan Goldberg

Profile picture for user brianssommer By Brian Sommer December 4, 2019
Summary:
A chance to catch up with NetSuite founder (and Oracle EVP) Evan Goldberg recently. We discussed a number of topics re: international expansion, vertical support, technology stack changes and more.

Evan Goldberg EVP Oracle NetSuite speaks at SuiteConnect London 2019

NetSuite is one the longest-lived multi-tenant cloud ERP firms in existence. It was acquired by Oracle in July 2016. Oracle has been quite committed in making NetSuite a key part of its cloud applications strategy.  A couple of months ago, after Oracle’s OpenWorld event, I put together a 3-part piece on Oracle’s new, strong positioning in cloud ERP:

NetSuite figures into that story as its cloud chops in the mid-market and SMB space are considerable. I wanted to get a bit more on the NetSuite story of late and recently got some time with NetSuite founder Evan Goldberg and Craig Sullivan who is GVP of International for NetSuite.

For much of the time that I’ve know Goldberg, he’s been the CTO of NetSuite. He understands the product and its technology quite well and it’s important that Oracle has kept him in a leadership role with NetSuite. 

Here are some of the highlights of that conversation.

International Expansion

As part of the acquisition narrative in 2016, we heard that Oracle would lend its considerable, global sales and marketing resources to NetSuite allowing NetSuite to reach prospects in dozens and dozens of additional countries worldwide.  Oracle has executive contacts, local marketing personnel and more in these locations. 

Expanding into additional countries often requires software enhancements to support new regulatory, compliance and business functionality. Expansion may dictate new or updated collateral, thought leadership materials and new intellectual property. New channel partners (e.g., implementers, resellers, software partners, etc.) may be needed in the new markets, too, and these partners will need to be recruited and trained. 

Goldberg and Sullivan indicated that NetSuite has been growing beyond its pre-acquisition boundaries. Where the company had a fair presence in North America and UK (with some presence in Japan and other locations), NetSuite now has a much wider/deeper presence in Western Europe especially in Germany, France, the Nordics and Benelux. Its market penetration in Japan, Singapore and Hong Kong has also grown. And, while NetSuite previously had a presence in Australia, it, too, is now more significant. Multi-national customers are fueling the global growth for NetSuite.

Partner acquisition and enablement are keys to global expansion in new markets. Likewise, localizing the solution for each new market takes time. NetSuite is able to leverage Oracle’s knowledge in localization requirements and Oracle’s large partner ecosystem can help with some of the NetSuite expansion globally.  

The net of our discussion on global expansion was this: global expansion is progressing well. NetSuite is adding the country-specific functionality as its footprint broadens. Since the acquisition, NetSuite finds it easier to speak with Oracle resellers and to recruit some of them to sell/implement NetSuite solutions. Some markets, like China, are huge and will take time to fully cover. 

Technology synergies

When Oracle acquired NetSuite, Oracle executives spoke of the synergies between the two firms. Oracle could bring additional advanced technologies and R&D funds to the mix thus helping NetSuite enhance its technology stack and data center rollouts globally. The two firms have long had a strong relationship mostly due to Oracle board chairman Larry Ellison’s early investment in NetSuite in the late 1990s. 

Oracle’s technology stack has improved a lot in recent years. A significant amount of discussion on these improvements can be found in the 3-part series mentioned above.  Evan indicated that Oracle’s Autonomous Database, Intelligent Assistants, container technology and more are being evaluated and/or implemented in future NetSuite releases. 

OCI (Oracle Cloud Infrastructure) is Oracle’s hyperscaler solution. The data centers, hardware and processing power can also be used to push NetSuite into more geographic markets. NetSuite now has customers in approximately 200 countries and OCI technology is being deployed into a large portion of the world, too. Should NetSuite need additional computing capacity, it will undoubtedly lean on OCI for this. 

Some differences in NetSuite’s technology stack vs. those that Oracle has in its own Fusion Cloud environment will exist for some time. NetSuite already had datacenters, a platform (NS-BOS) of its own and a version of multi-tenancy that ran on Oracle’s database years ago. As new Oracle capabilities are available and vetted by NetSuite, they may get greenlit for NetSuite applications. 

Java will also factor into NetSuite’s future plans. 

Manufacturing and PSA functionality

NetSuite has a number of modules to support some aspects of manufacturing. Evan indicated that NetSuite is best used when the customer needs:

  • Support for kitting
  • Contract manufacturing support
  • A retail web solution to order manufactured goods off a website/e-commerce solution

Goldberg also stated that NetSuite is very interested in supporting manufacturing customers that are moving to a product-as-a-service business model. The reason for this interest is that NetSuite has many manufacturing and PSA (professional services automation) modules. 

NetSuite’s high-end solution, OneWorld, is often sold into two-tier manufacturing firms. Market uptake of this solution continues to grow. 

NetSuite’s PSA product line, OpenAir, continues to enjoy market success (Prior to NetSuite’s acquisition of OpenAir, QuickArrow, another PSA product, was acquired by OpenAir.). NetSuite’s main product lines and its OpenAir PSA solution are still standalone products although integrations exist between them. No update was given as to an eventual merging of OpenAir into the core NetSuite solutions. 

Product enhancement direction

Evan indicated that NetSuite will continue to invest in vertical extensions to the core products. Additionally, NetSuite will continue to enhance its user experience (Note: Oracle has done this with its Fusion Cloud applications). Additional R&D efforts will include the development of Intelligent Assistants throughout the suite. 

Connections to Oracle Fusion Cloud Apps & JD Edwards Apps

NetSuite applications are a separate and distinct product line from other solutions that Oracle sells. While Oracle generally suggests that large firm prospects should consider Cloud Fusion apps and smaller firms should pursue NetSuite, they leave the decision to the prospect. 

Likewise, JD Edwards customers that are interested in acquiring a new cloud solution are encouraged to do their own selection and choose either NetSuite or Oracle Cloud Fusion apps. Again, the customer makes the choice. 

Customers will need to evaluate how much functionality they need, the geographic coverage of each potential solution and the depth of vertical support within each product line.  

My take

I like the light-handed approach that NetSuite and Oracle are using with their existing customers. They are not demanding that users of older products migrate nor are they implementing drop-dead deadlines where older customers must migrate by a certain date. They aren’t even dictating whether the customer must adopt a specific Fusion or NetSuite solution. I suspect customers will react favorably to this (and I know competitors that are employing aggressive tactics are finding customers frustrated with their hardball tactics.). 

NetSuite product development continues and the focus on intelligent technologies and more geographic coverage is laudable. I do believe that a more pronounced effort in vertical solutions is overdue.

Rapid geographic expansion is a key to NetSuite’s long-term success and rightly so. Sage’s Intacct solution can cover many of the same geographic markets as NetSuite and it has Sage’s channel, capital and other resources to lean on. To stay in front, NetSuite must be mindful of competitors like Sage.